EU needs budget checks, ECB chief warns
(10 September 2010 – Europe) Jean-Claude Trichet, chief of the European Central Bank, has called for a ‘quantum leap’ in budget checks on eurozone nations as a result of the Greek debt crisis.
Mr Trichet was interviewed by the Financial Times earlier in the week and said that the suspension of the voting rights of member states who breach the conditions ‘is something that should be explored’ but that he did not back expelling them.
The ECB call for a quantum leap in the reinforcement of fiscal surveillance with, in particular, what I would call the reversal of the burden of the proof, Mr Trichet added when asked about the Greek debt crisis.
We have called for the quasi-automaticity of procedures and sanctions, Mr Trichet highlighted.
The ECB have called for a reinforced independent way of assessing the fiscal situation and we have also called for a quantum leap as regard the surveillance of competitiveness and imbalances in euro area member countries, Mr Trichet added.
The central bank’s chief warned that governments and financial institutions had to be permanently in a state of ‘credible alertness’ for further shocks amid fears that the economic recovery is running out of steam.
We are in a situation where central banks in particular, and also other authorities, have to remain alert and have to know that we are in an uncertain universe, Mr Trichet highlighted.
But he said Europe was not at risk of deflation.
No, I do not see the materialisation of a risk of deflation, or either of inflation, at present. We went through the heat of the crisis without any materialisation of deflationary risks, Mr Trichet added.
The ECB call for a quantum leap in the reinforcement of fiscal surveillance with, in particular, what I would call the reversal of the burden of the proof, Mr Trichet added when asked about the Greek debt crisis.
We have called for the quasi-automaticity of procedures and sanctions, Mr Trichet highlighted.
The ECB have called for a reinforced independent way of assessing the fiscal situation and we have also called for a quantum leap as regard the surveillance of competitiveness and imbalances in euro area member countries, Mr Trichet added.
The central bank’s chief warned that governments and financial institutions had to be permanently in a state of ‘credible alertness’ for further shocks amid fears that the economic recovery is running out of steam.
We are in a situation where central banks in particular, and also other authorities, have to remain alert and have to know that we are in an uncertain universe, Mr Trichet highlighted.
But he said Europe was not at risk of deflation.
No, I do not see the materialisation of a risk of deflation, or either of inflation, at present. We went through the heat of the crisis without any materialisation of deflationary risks, Mr Trichet added.
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